Stateowned airline SA Airways has secured the R3.5bn it requires to continue financing working capital requirements until June, acting CFO Deon Fredericks revealed on Monday.
The cash-strapped airline requested funding of R21.7bn from the government last year to recapitalise its balance sheet and provide working capital to help implement its three-year turnaround plan. R5bn was provided by government in the medium-term budget last year.
News reports revealed that banks remain reluctant to provide long-term debt to SAA, which would be cheaper than the short-term financing that SAA is currently relying on.
“The lack of clarity has also led suppliers and creditors to impose stricter payment terms on the airline, placing further pressure on its already precarious cash flow situation.”Said Fredericks.
“We appreciate the lenders are proceeding with caution, but they are satisfied with the progress. We will keep operations going on until the end of the current financial year,” said SAA spokesperson, TlaliTlali.
Meanwhile, SAA will remain a single entity but will be broken into three separate business units as part of its restructuring plan.
“SAA will remain as one entity with three business unit’s superimposed on current route network. International, regional Africa and domestic market in South Africa,” TlaliTlali added.
